The export tax at source remained unchanged at 0.60% for the fiscal 2015-16 as the parliament yesterday passed the Finance Bill 2015.
The tax has, however, been increased by 0.30% to 0.60% in case of exporting readymade garments.
That means the rate becomes flat at 0.60% for all the export items – down 0.40% from the 1% as proposed in the budget for the fiscal starting on July 1.
Currently, the clothing industry owners pay 0.30% tax at source, while the other export-oriented industries including jute products, frozen foods, leather goods and packed foods pay 0.60% tax.
Finance Minister AMA Muhith revised down the tax rate at the request of Prime Minister Sheikh Hasina just before passing the bill by the parliament. He also adopted some other changes in the bill, revising the budget proposal on income tax, Value Added Tax and customs duties.
Finance Minister AMA Muhith has proposed the passage of the bill which included the implementation of government’s financial proposals and amendments to several laws.
Earlier on June 4, the bill was tabled along with the proposed budget for the fiscal 2015-16.
The new finance bill will witness a total of 23 changes from the proposed ones, including 5 requested by the Prime Minister Sheikh Hasina.
The proposed VAT on private universities, medicals and engineering colleges was reduced to 7.5% from the proposed 10% while all the taxes and duties exempted for import of raw materials for cancer medicine manufacturing, following requests by the Prime Minister.
The proposed tax on poultry and fisheries sector was also restructured considering their contribution in fulfilling protein demands in the country.
The tax-free income ceiling from the sector was fixed at Tk10 lakh, while 5% tax will be imposed on income above Tk20 lakh and 10% on income above Tk30lakh, according to the amendment made after Hasina’s request.
Speaker Shirin Sharmin Chowdhury chaired the session while leader of the opposition Rawshan Ershad was also present.
Jatiya Party members MA Hannan, Peer Fazlur Rahman, Begum Mahzabin Morshed, independent lawmakers Rustom Ali Farazi, Nurul Islam Omar and Abdul Matin proposed sending the bill to the select committee for further scrutiny, eliciting public opinion and amendments to several provisions.
Later, the proposals for sending the bill to the select committee and eliciting public opinion were rejected through voice votes.
The House accepted some amendments brought by lawmakers M Shahab Uddin of Molvibazar-1 and M Shahiduzzaman Sarkar of Naogaon-2.
According to the amended bill, fourth generation new banks, insurances and financial institutions, approved in 2013 will enjoy the income tax privileges as they will have to pay 40% corporate tax, despite being non-listed companies.
Muhith earlier proposed a reduced corporate tax rate for publicly traded banks, insurance companies and financial institutions from 42.5% percent to 40% while keeping the rate unchanged at 42.5% for non-listed ones.
Meanwhile, the government scrapped 4% proposed VAT on e commerce, the finance minister said, adding that the proposed 5% additional duty on the service will be reduced to 3%.
The government has also relaxed the provision that made it obligatory for guardians or parents to have electronic Taxpayers Identification Numbers (e-TIN) if they send their children in English medium schools.
With the passage of the bill, the provision will only be applicable for guardians educating their children in city corporations and municipality areas of districts. Guardians in other areas will not have to obtain the eTIN as mandatory.
The government has also included “technical services fee, technical know-how fees or technical assistance,” through merging it with professional services in the list of tax at source on foreigners based on their professions and types of services they provide. With the amendment, foreigners now have to pay 20% tax at source if provides technical services.
The government also changed the price slabs for each 10-stick cigarette packs. The lowest price slab will be at Tk18 from the proposed Tk19 while the price slab for low brands was set at Tk20-Tk42 from the proposed Tk20-Tk39. However, the proposed slab for medium and high brands remained unchanged.
With the first schedule of Customs Act 1969, definitions were changed for some products, including copper wire used in transformer manufacturing, ware rod used in bicycle manufacturing and compressor used in refrigerator manufacturing.
